Suchergebnisse

This paper seeks to explain the apparent contradiction in the UK's manufacturing trade performance over the past two decades: on the one hand, the early 1980s witnessed a substantial contraction in manufacturing employment along with a considerable surge in imports and decline in UK exports; on the other hand, UK trade performance, particularly exports, seems to have improved in the second half of the 1980s and early 1990s. The paper shows that the substantial, but temporary, appreciation of sterling in the early 1980s caused permanent damage to both the UK's trade performance and industrial base; and that the UK's relative investment performance, via its hypothesised impact on product quality, helps to explain the subsequent improvement in UK trade performance since the mid‐1980s.

"The process of globalisation has been ongoing for centuries, but few would doubt that it has accelerated and intensified in recent decades. This acceleration is evidenced as much by the strong synchronicity in the rapid transmission of financial crises starting in late 2007 as it is by the decade of almost unprecedented growth in international trade and financial market liberalisation that preceded it. This book shows how the international economy has become more connected via increased production, trade, capital flows and financial linkages. Using a variety of methodologies, including both panel econometrics and DSGE modelling, a team of experts from academia, central banks and the IMF examine how this increased globalisation has affected competitiveness, productivity, inflation and the labour market. This timely contribution to the globalisation literature provides a longer-term perspective while also evaluating some of the potential implications for policy makers, particularly from a European perspective"--

Outsourcing is proxied by constructing import penetration terms for groups of countries (distinguishing between imports from industrialized countries and imports from low‐wage countries) for each four‐digit industry within the broader categories of textiles and non‐electrical machinery. The results show that imports from low‐wage countries have made a significant contribution to the decline in the wage‐bill share and relative employment of the less‐skilled in the UK. The degree of outsourcing may differ between industries, and large currency appreciations may have a disproportionately large impact on the economic fortunes of the less‐skilled.

The US experienced a considerable increase in inequality between skilled and less-skilled workers during the early 1980s—a period which corresponds with a large temporary appreciation of the dollar. This article investigates the reasons behind this rise in inequality by evaluating the impact of trade with low-wage countries (LWCs) and technological change on the wage bill share of skilled workers (which is designed to capture movements in inequality arising from changes in both the relative wage and employment opportunities of the less-skilled). We find that an increase in US imports from LWCs—encouraged by the large appreciation of the dollar in the early 1980s—seems to explain some of the rise in US inequality in low-skill-intensive sectors, but that technological change (proxied by R&D expenditure) explains the rise in inequality in high-skill-intensive sectors. However, given that the timing of the sudden rise in US R&D expenditure corresponds with the appreciation of the dollar, it may be the case that the deterioration in US trade competitiveness during this period contributed to the rapid increase in the rate of technological change via mechanisms such as 'defensive innovation'. Hence one might also argue that the technology-based explanation for the rise in US inequality could actually be a trade-based explanation.

Productivity performance in European countries has been a policy concern for some time. This paper shows that productivity can be enhanced by product market policies which, by increasing competition and efficiency, facilitate higher rates of firms' entry and exit (i.e., firm churning). Drawing on annual country-sector data for the period 2000-2014 across the EU countries, we find that: (i) competition-enhancing regulation is associated with a higher rate of firm churning; (ii) business churning, in turn, appears to be positively related to higher total factor productivity at the sector level by facilitating the entry of new competitive firms and the exit of less productive ones. Overall, we conclude that stringent product market regulation can be indirectly associated, via its impact on business dynamism, with the somewhat weak productivity performance in a number of EU countries. Thus, our results point towards significant productivity gains that could follow from the introduction of further competition-enhancing measures in product markets.

Structural policies in the euro area are of great interest for the Eurosystem, particularly as they can support the smooth functioning of the Economic and Monetary Union (EMU) and the effectiveness of monetary policy. This paper adopts a broad definition of structural policies, analysing not only the benefits of efficient labour, product and financial market regulations, but also emphasising the importance of good governance and efficient institutions that ensure high quality and impartial public services, the rule of law and the control of rent-seeking. The paper concludes that there are many opportunities for enhanced structural policies in EU and euro area countries which can yield substantial gains by boosting long-term income and employment growth and supporting social fairness, also via better and more equal opportunities. It provides empirical and model-based analyses on the impacts and the interactions of structural policies, highlighting synergies between growth and inclusiveness, while acknowledging that structural policy changes need to be country-specific to reflect national conditions and social preferences. Well-designed structural policies would also strengthen economic resilience and convergence of Member States, bringing the euro area closer to the requirements of an optimal currency area and improving the transmission of monetary policy. The paper also discusses the political economy causes of the sluggish implementation of socially beneficial structural policies and assesses ways to deal with possible short-term costs of reforms.

The start of hostilities in the Gulf in January appears to have removed some of the uncertainties surrounding the oil market, and oil prices have dropped to around 20 dollars per barrel. This development should help sustain growth and reduce inflation over the next two years. Box A sets out some calculations of the effects of the change in our oil price assumptions on our forecast. The appreciation of the D-Mark bloc and the emergence of a recession in the US driven by a wave of bank failures has persuaded us to be less optimistic then we were in our last forecast. Table 1 summarises the outlook. We are forecasting a slowdown in the rate of growth in the major economies in 1991, with some recovery in 1992 and thereafter. The slowdown has already taken place in the US, the UK and Canada, whereas in 1990 Japanese and German growth was at historically high levels. Chart 1 plots levels of capacity utilisation in the major economies. Only in the US has output clearly fallen below capacity, but record levels of utilisation in Japan, Germany and France inevitably imply some slowdown in growth from recent levels.